Tech Bust Expected To Last As Digital Asset Inflows Soar

The world of venture capital and private equity has been experiencing significant shifts in recent years, with the tech industry at the center of attention. In 2015, Slack CEO Stuart Butterfield praised the favorable conditions for businesses to raise money due to the abundance of venture capital funds. This trend continued until 2021, with US venture capital investment tripling between 2016 and 2021, fueled by low interest rates that attracted investors to Silicon Valley.

However, the tide has turned, and the tech bust is expected to last through 2024 and beyond. The easy money that once inflated startup valuations and fueled market liquidity has dried up, leaving many startups struggling to survive. WeWork, once valued at nearly $50 billion, is a prime example of a company facing difficulties in the current climate.

Despite a strong rebound in the Nasdaq index of technology stocks in the first half of 2023, driven by excitement around artificial intelligence, experts warn that great speculative bubbles take years to unwind. The tech stock bear market is expected to return in 2024, with more startups failing and venture capital funds continuing to post negative returns.

In contrast to the challenges faced by the tech industry, investment products based on digital assets have seen record-breaking inflows. From March 11 to March 15, these products attracted $2.9 billion, surpassing the previous record and bringing the year-to-date inflows to $13.2 billion. Bitcoin inflows accounted for the majority of this growth, while leading altcoins such as Ethereum, Solana, and Polygon experienced capital outflows.

As the AI race heats up, Nvidia, the company behind the most sought-after hardware in the world, is set to unveil the next generation of its chip at the annual GPU Technology Conference (GTC) in San Jose, California. The B100, rumored to be Nvidia's first multi-die chip, is expected to be even more powerful than its predecessor, the H100. However, the high demand for these chips has raised concerns about potential shortages, prompting competitors like Amazon and Google to develop their own versions to stay competitive.